While foreign portfolio investors have been selling stocks of Indian companies, overseas venture capitalists continue to invest in Indian assets. In a sharp contrast to foreign institutional investors (FIIs) selling shares worth Rs 15,000 crore in the first quarter, foreign venture capital (FVC) investors have invested close to Rs 17,000 crore in Indian assets during the April-June quarter. The spurt in foreign venture capital investments has been attributed to dipping asset prices, the presence of more India-dedicated venture funds, besides the slide in the stock market. While IT companies continue to account for a majority of foreign venture capital investments, the proportion of non-IT investments — both by activity and value — has gone up.   more »

A tightening bias of monetary policy, slowing demand and growing liquidity concerns, could have a negative impact on the credit profiles of Indian real estate companies, says a report by rating agency Fitch. The slowdown would mainly affect the smaller real estate companies while increasing the relative strength of some large players, the report said.The prolonged slowdown could also reduce the appetite of private equity, it said.   more »

The year 2008 began keeping pace with the heightened deal activity in 2007 and saw the completion of the much anticipated Tata Motors’ acquisition of the two marque brands Jaguar and Land Rover for $2.3 billion from Ford Motors. However, the downturn in the global and domestic economies seems to have impacted India’s M&A scenario. While the total number of transactions fell from 663 in the first half (H1) of 2007 to 467 in H1 2008, the total deal value saw a sharp slump, dipping by over 40% from US$38.4 billion in H1 2007 to US$21.4 billion in H12008. The sectors which have been driving the strategic M&A activity include Pharmaceuticals, IT&ITeS , Banking & Financial Services (BFSI) and Real Estate. The outbound investments accounted for US$ 8.2 billion of M&A activity spread over 96 deals. (Sanjeev Krishan : The author is a director at PWC)   more »